JG Summit Holdings Inc. (JGS), the Gokongwei Group’s diversified conglomerate, posted a 16 percent year-on-year (YoY) improvement in net income to P17.9 billion for the first nine months of 2024.
The firm said in a disclosure to the Philippine Stock Exchange (PSE) that higher earnings came on the back of a double-digit topline expansion coupled with the gains it realized from merging Robinsons Bank with the Bank of the Philippine Islands (BPI).
Despite inflation headwinds persisting into the third quarter, the group delivered a YoY consolidated topline growth of 10 percent to P277 billion in the first nine months of 2024.
This was powered by a healthy demand for travel and leisure activities, a higher preference for value food and beverage products, and increased utilization rates in JGS’ petrochemical plants.
Improving contributions from the conglomerate’s core investments, widening EBITDA (earnings before interest, taxes, depreciation, and amortization) margins for most core businesses, and the gain from the bank merger earlier this year allowed core profits to rise 39 percent YoY to P20.3 billion.
These were more than enough to outpace the increases in depreciation and interest expenses observed across its subsidiaries year-to-date (YTD).
Zooming into the third quarter of 2024, consolidated revenues remained steady at P89.1 billion but net income dropped 39 percent YoY to P3.1 billion.
The drop was primarily caused by larger losses from JG Summit Olefins Corporation (JGSOC) with the prolonged trough in the global petrochemical industry cycle, lower sugar profits from URC due to price corrections and high-priced inventories, and reduced average fares from Cebu Pacific to stimulate demand during the typical lean period in Philippine aviation.
“While the overall macro environment is expected to rebound with the easing inflation, most of our businesses are still affected by the weaker consumer sentiment that has dampened demand for products and services,” said JG Summit President and CEO Lance Y. Gokongwei.
He added that “we are seeing the propensity of consumers towards value food and beverage products, the seasonally weaker quarter for travel and the prolonged industry downcycle for petrochemicals impacting our latest results.”
“We, however, expect a better fourth quarter to finish the year on a good footing. This will also establish a stronger base as we pursue initiatives to sequentially drive better topline growth and margins across our operating units,” Gokongwei noted.
Universal Robina Corporation reported that higher forex gains in 2023 as well as the discontinuation of its China business weighed on bottomline, with attributable net income down by 18 percent to P8 billion for the period.
Robinsons Land Corporation’s saw the double-digit growth of its investment portfolio outpacing the challenges faced by its Residential segment. Net income reached P9.3 billion.
Cebu Air Inc. reported that higher depreciation and financing costs related to its growing fleet led to the 32 percent and 33 percent decline in its YTD core and net profits to P3.2 billion and P3.4 billion, respectively.
Unfavorable global market conditions continued to prevail for JGSOC, undermining the larger volumes it saw versus last year.
Industry-wide polymer spreads dropped to historic lows and weighed on JGSOC’s EBITDA, closing the period at a P3.8 billion loss. Including higher financing costs and depreciation, net losses for widened to P11.4 billion.
JGS’ equity share in Manila Electric Company’s net income grew 19 percent YoY to P8.7 billion due to record high sales volumes plus higher contributions from its power generation and retail electricity supply businesses.
For Singapore Land Group (SLG), JG Summit’s results accounts for the first half performance only, given SLG’s semi-annual regulatory reporting frequency.
Equity earnings from SLG posted a 15 percent improvement to P1.3 billion, on the back of the robust performance of its hotel business and the increase in the company’s rental income.
The dividends the conglomerate received from PLDT, Inc. slipped by 11 percent to P2.3 billion resulting from the absence of the special dividends declared in 2023, despite the additional two pesos of regular dividends per share it distributed this year.
Given the effectivity of the merger between BPI and Robinsons Bank at the beginning of 2024, JGS received cash dividends from BPI amounting to P373 million, which more than offset the decline in dividends from PLDT.